Intel software engineer: Is Win7 on netbooks worth the premium?

It may be the clearest demonstration to date that the working relationship between Intel and Microsoft is about as loosely coupled today than at anytime in the companies' histories. A very frank but official blog post from Intel software engineer Josh Bancroft, dated Tuesday, warns prospective netbook buyers that one of the elements not revealed by Microsoft's not-very-revealing announcement on Windows 7 SKUs earlier this week concerns licensing fees.

"Currently, when Microsoft sells a license of Windows XP on a netbook, they're making very little money," writes Bancroft. "They would have preferred to stop selling XP altogether a long time ago. But the low cost of an XP license adds very little to the overall cost of a netbook -- important when you're selling a device for $300-$500. No one but Microsoft knows how much it will charge for the various versions of Windows 7, but it's safe to assume that it won't be much (if at all) cheaper than Windows Vista. And adding, say, $100 to the cost of a $400 netbook just to pay for Windows 7 is going to be a tough proposition all around."

Bancroft also states he's impressed with the performance of Windows 7 on netbooks, noting that this new edition has made inroads on platforms where Windows Vista had failed. But he then asks a series of rhetorical questions of his blog readers, including whether they truly believe the almost certain price premium that Starter Edition (his candidate for the netbook platform of choice) will add enough perceived value to a netbook product over and above a Windows XP-endowed version, to justify the price premium. He throws in the discovery that Starter Edition has an apparently artificial multitasking limit of three applications at one time, a limit XP does not have.

Intel has an interest in a netbook operating system of its own, specifically a streamlined Linux distribution called Moblin. [Industry Standard reporter Lincoln Spector spotted this blog post first.]